Bank of New York Mellon has agreed to a joint venture with a Chinese asset management firm.

BNY Mellon Western Fund Management will manage domestic Chinese securities, but is expected to develop additional products.

Jon Little, a vice-chairman for BNY Mellon Asset Management, said the long-term goal for the venture with Chinese asset management firm Western Securities is to develop institutional business in the region. The new business is scheduled to open in 2008.

In September, BNY Mellon Asset Management won a mandate to provide sub-advisory services to the China Southern QDII fund. The fund was capped at $4 billion despite being oversubscribed by $2.5 billion from high demand from Chinese investors. BNY Asset Servicing was named as overseas custodian for the fund.

Emerging markets are being tapped by the fund manager as a significant avenue for growth. Last week, BNY Mellon agreed to buy ARX Capital Management, a six-year-old asset manager based in Rio de Janeiro with over $2.6 billion in assets under management in 20 equity and hedge funds.